Crop insurance

What are the pro's and con's? never had it and was wondering about to to buy it. Does it pay off for drought, flooding, fire damage and deer

The foundation is the policy covers a percentage of your typical yield and it is up to you how much coverage you want. Keep in my mind they typically insure from 50 to 75 percent of your typical yield going in 5 percent increments from the 50 to the 75. If your farm has never produced 200 bushel corn per acre the insurance provider will not insure on that basis. You can also get policies that cover revenue as well as weather related losses. You have to harvest your crop in most instances so they can measure your loss against expected yield. In some instances such as flood or drought they can come out and check assuming you will have a near complete loss before the time of harvest. Do not destroy an affected crop before the adjuster looks at it as he is the authority as to how the crop is to be handled. Even in some situations where it looks hopeless the adjuster may still have you poke with the combine.
It should be said that very major changes could be coming with subsidized crop insurance if it still exists for 2014. Usually the insurance agents do not have their info packs put together much before the end of January. Do not assume much based on past programs at this point.

Yes it does pay out. The premiums are subsized by the fed.
There are several programs/options the one I have is on revenue. If your crop fails it pays, if the price drops below proftable it pays. No self respecting insurance company could afford to offer that kind of insurance.
Down side you do not know what the payout will be until late in the year because they do not set the "market price" until after most of the crops are harvested.
If you store grain and think you have a claim it can be fun. Just think--how do you know what the yield was--accurately?

Had a bad experience with the insurance they mandated for a couple years in the early 90s.

Now my understanding is, you need some cropping history before it kicks in. Need to be in the system a while before you can get payouts? And if you are improving your yields, then it doesn't catch up for a while, as you keep yielding more than you did a couple years ago, the payouts are based on a couple years ago.....

Paul

Different insurances cover different issues, you have to read the policies. I usually insure to 65-75% to cover my costs and a little more.

If you have no crop history you start with your county average yield as a proven yield. Then as you prove your yields your base yield either goes up or down, based on your own yields over the years.

You insure at the level you want up to 85 percent of the base yield.

It covers all losses except fire.

You may insure field by field but the costs are higher. If you have all fields combined then you only collect if your average for all fields is below your base yield.

Ex- you have a base or proven yield on one 40 acre farm of of 150 bpa. and the other 40 acres base yield 140. That"s a total of 11600 bushels.

We"ll say you choose the 70% level of insurance so you are guaranteed 8120 bushels off the 2 forties.

If you get 6000 off of one 40 and 3000 off another 40 that totals 9000 bushels so you would collect nothing on yield loss. Even though one 40 was below your base yield.

You can also insure for revenue income as well. That takes in to account the price.

My fingers would get tired before I explain all of that so call your local agent and let him explain all of that to you.

Gary

Its sure not a moneymaker, but it does help you sleep at night!

They're right, it just makes you sleep easier. I don't care for insurance, but I'm glad I had it last year. The drought changed my thinking. I was in a field of corn making 15bpa when it's normally 180. There are lots of levels and other things to consider, from the bottom all the way to top. Since I'm an amateur, I had to take the county averages on places where I just started. I would take a look at what those are where you live.

Ahhhh, the key word, "mandated" That was most likely CAT.

Catastrophic ins. 50% of base yield at 60% of the price, and basic units only, no replant, etc.

Very poor coverage, but the price was right, $50 per crop when it first came out.

Think of your health insurance being "mandated" ????

Scary huh?

Gene

Doesn't cover "all" losses.

Fire: If caused by an act of God, lightning for instance.

Livestock damage or chemical overspray or misapplication of chemicals or carryover: Not covered.

Neglect or poor farming practices: Not covered.

Experimental or using varieties of seed not adapted to the area: Not covered.

Wildlife: Covered if an unavoidable circumstance or occasional. If you have loss after loss, or it if obvious to the adjuster that you are running a hunting preserve or putting out lots of foodplots elsewhere on the property, etc. A deer stand and salt lick every 200 yards looks suspicious.

Private hail, fire and lightning ins. is also available and works good in conjunction with MPCI.

Private hail policies cover hail, fire, lightning, vandalism and Malicious michief, and collapse of bridges, docks, and culverts and overturn of trucks. Plus some private policies covers grain in storage on an all risk basis which could include theft, wind, tornado, etc. Private hail policies work good for hail, cause they offer coverage on an acre basis. 5 acres destroyed by hail, they pay on the 5 acres, whereas MPCI may not pay at all since it covers on a "unit" basis.

Best have a good agent go over all this. An agent specalizing in crop ins. Not a life ins. agent who writes a handfull of policies.


March 15 is the deadline as a rule for Spring crops.

Gene

Hey guys I really appreciate the information. My neighbor and I started back doing some farming the year before last. We rented 40 acres but have another 300 rent free. There is about 70 acres right in the middle of a hunting preserve and the deer mowed the beans down. The stalks are probably 3 foot tall and they ate the pods down to about a foot. They don't seem to bother the wheat but I don't know of anything else to plant that the deer won't bother and just a couple of the places can we go in a eradicate the deer.

There was a lot of talk in the crop ins. industry the past three or four years about ground that was used for hunting. If the adjuster is worth his salt, and observant, he will not sign off on a loss due to wildlife.

I would not rent this ground on shares. Tell the owners you will put the crop in on a custom farming basis only. Set a price for you working the ground, planting, harvesting etc. Do no accept a share of the crop, then you do not have to declare it on your crop ins. acreage report, or pay a premium. You can only insure ground that you have a share in, own or cash rent.

Steer clear of hunting preserve ground. Trouble waiting to happen.

Gene

Very good advice.

Gene You should try farming over a thousand acres on federal wildlife land. Wildlife damage is just like any other damage.